On ‘Demand Side’ Economics: Why Spending Cannot Improve the Economy but Freedom Can
This article seeks to explain as clear as possible one of the most intellectually difficult economic concepts to grasp: how inflation will destroy an economy. It is meant to give answers to the economics questions many people have today. It covers the basics of economics and then argues against the long held belief, originated by John Maynard Keynes, that stimulus money will jumpstart an economy. It can be considered an Economics 101 and 201 course.

ReviewsExcellent denunciation of Keynes (Amazon US)
“Pawlik manages to successfully destroy Keynesian economic theory in a manner even a high school student should be able to understand.

This essay is an excellent start point for anyone wishing to begin their economics education - no matter their political leaning.”

Why bailouts are plain wrong! (Amazon UK)
“If you want economics that are taught by professors in ivory towers, you do not want this book. If however like myself you want economics that are applicable to real world events, you must read this book.

Clear cogent arguments laid bare for the layman, within is explained why bailing out the banks and quantitative easing in general is making our economy worse, not better.

A thoroughly enjoyable and interesting read for anyone prepared to move away from the now debunked classical economics.”

Quotes
Keynes gets the problem of economics completely backwards. The problem of economics is unlimited demand with limited supply. The implicit argument of Keynes is that the problem of economics is limited demand with unlimited supply.

Most people can, on an individual level, see that saving money, increased production, etc., are naturally good things. But when a bunch of economists start blathering about stimulus money, the need to keep business chugging, job creation, etc., and then blow it up to a national level, many people get lost in the jargon. On an individual level, savings and hard work are good things. But on a national level, hyper consumerism and mounting debt are pure enlightenment.

When you trade an apple for an orange, which one of you is on the “demand” side and which one of you is on the “supply” side? You are both at the same time.

Of course, it makes sense for the Federal Reserve to define their purpose as fighting deflation. To that end, they are succeeding!

Monetary deflation happens in the same way that a balloon deflates: it can only deflate after first being inflated. “Deflation” is not a legitimate ill and is only secondary to the primary ill of inflation.

If it were true that any company purposely encouraged war, it would indeed be an outrageous evil. However, you have these statists openly and proudly advocating that war is good for an economy. The implicit conclusion is that a nation should engage in war—sending young men and women into harm’s way—solely to create a need for government spending and thus an alleged better economy. Who are the war profiteers?

Politicians want to have their money and spend it too.

I will concede that turning on the money spigot is indeed “stimulus.” But it is a short-lived one that results in a worse crash. Stimulus money can be compared to drinking an energy drink for energy instead of eating a well-balanced diet.

The average person works and accumulates savings over 40 years in order to retire. From the time they start to the time they finish, assuming only 2% inflation per year, prices will have risen by 221%.

A chart showing the price of gold, the best gauge of inflation, from 1950 to the present: